On or about December 4,
2007, Activision, Inc. (the Company), plaintiffs, and certain current
and former officers and directors of the Company notified the United States
District Court for the Central District of California that they have reached
agreement in principle to settle the shareholder derivative litigation pending
against such current and former directors and officers of the Company under the
caption In re Activision, Inc. Shareholder Derivative Litigation, Case No. CV-06-4771
MRP (JTLx). The nonbinding agreement in
principle is subject, among other things, to the negotiation of a binding
definitive settlement agreement addressing all settlement terms, as well as to
further approval by the parties and the court.

The parties are continuing
to negotiate and document settlement terms, and the Company does not presently
intend to make any further announcement regarding the potential settlement
unless and until a definitive settlement agreement is reached.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.